Settlement-day Finality for Automated Clearing House Credit Transactions — 1999-11-17 [99-29991]

The Board has decided to make the settlement for ACH credit transactions processed by the Federal Reserve final when posted, which is currently 8:30 a.m. eastern time on the day of settlement. The Board considered a number of risk control measures and has decided to require prefunding for any ACH credit originations that settle through the Federal Reserve account of a depository institution that is being monitored in real time. The Board believes that settlement-day finality for ACH credit transactions will reduce risk to receiving depository financial institutions (RDFIs) and receivers and that the prefunding requirement will permit the Reserve Banks to manage their settlement risk as effectively as they do for other services with similar finality characteristics. The changes will be implemented by the Reserve Banks in early 2001 to permit time for necessary software modifications.